PG&E Expands Power Capacity in San Jose Amid Growing Demand

UPDATE: PG&E is accelerating its expansion plans in San Jose as electricity demand surges, with projections indicating a significant increase in the South Bay’s energy needs. During a recent interview, PG&E Chief Executive Officer Patricia Poppe announced that the utility is focusing on vital upgrades to meet the demands of the booming tech industry.

Officials predict that electricity requirements in the area will exceed current projections, pushing PG&E to enhance its infrastructure. “San Jose is very important because it has room to grow,” Poppe stated, underscoring the city’s unique ability to accommodate tech companies eager for power.

PG&E is moving forward with critical upgrades at two substations in downtown San Jose—Substation A at the intersection of South Montgomery Street and Otterson Street, and Substation B located at 260 Coleman Ave. These upgrades are crucial as the tech sector’s appetite for energy continues to soar, particularly due to an influx of data centers and electric vehicle demands.

According to PG&E Vice President Jake Zigelman, the utility anticipates that the load growth driven by the tech industry could reach approximately 2.8 gigawatts by 2040, nearly tripling the current energy usage of 1 gigawatt in San Jose. “About 20% of that projected data center load growth, or nearly 2 gigawatts, is concentrated in San Jose,” Zigelman explained.

Poppe revealed that misconceptions about PG&E’s capacity had previously hindered growth. “One of the big misunderstandings was that tech companies thought PG&E was out of power, but they were wrong about that,” she said. “Once tech companies found out we had power, they wanted to grow here.” This newfound confidence has sparked a rush for new power hubs.

As PG&E prepares to accommodate this demand, it has received inquiries for additional power capacity from various locations, including San Francisco, Sacramento, and the Central Valley. The utility is responding to a pipeline of projects requiring around 10 gigawatts of capacity, with 17 data centers totaling roughly 1.5 gigawatts already in the final engineering phase.

The implications of these developments extend beyond corporate interests. PG&E estimates that every gigawatt of new demand generated by data centers could potentially lower electricity bills for consumers by 1% to 2%. “When we share the grid with more customers, we can lower the cost for everyone,” Poppe noted.

However, not everyone is on board with PG&E’s aggressive plans. Consumer advocacy group The Utility Reform Network (TURN) has expressed concerns that data centers may drive up electric rates for California residents. “It’s essential that those costs are recovered fairly and don’t cause electric rates to increase for households who are already struggling,” said TURN Executive Director Mark Toney.

As of September, PG&E reported a decrease in monthly bills by an average of $5 for typical residential ratepayers, signaling a rare relief amid a history of rising costs.

Looking ahead, PG&E is poised to support transformative projects in the region, including Google’s proposed transit-oriented neighborhood near downtown San Jose. Poppe confirmed, “We’re ready to power major infrastructure projects like Google’s, which is why we are investing in those substations.”

With the demand for power escalating, PG&E’s strategic decisions in San Jose could have lasting impacts on the region’s economic landscape and residents’ utility costs. As the utility ramps up its efforts, all eyes will be on the forthcoming developments in this rapidly evolving energy landscape.